Small Business Optimism Abounds

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About 50Ys ago, a group of female activists created NOW, the National Organization for Women. At the time, some of their concerns were the Equal Employment Opportunity Commission's refusal to outlaw job ads with phrases like "Help Wanted Male" and "Help Wanted Female," or job postings asking for a "well-groomed gal," according to The Associated Press.

Women's rights have clearly come a long, long way in those 50 years, but there's plenty of work to be done - especially for women who are small business owners today.

Consider a recent survey by the American Express OPEN Small Business Monitor that found female small business owners still earn less than their male counterparts.

The survey found that 57% of male small business owners are likely to pay themselves a salary vs. only 43% of women small business owners. What's more, the survey found male small business owners paid themselves $17,470 more per year than their female counterparts.

Taking a look at salaries overall, the survey finds that small business owners overall that are earning a wage, are paying themselves more - $76,010 a year. That is an increase of $2,310 from the prior year or about 3% higher.

As for hiring intentions, the survey found 39% of small business owners said they plan to hire this year, an uptick over the 34% who said they planned to hire the year prior. The biggest problem here though is that small business owners said finding the right job prospects is their #1 challenge to growth (at 19%).

As community bankers know, small business owners are generally an optimistic bunch. Here the survey found that 84% of small business owners identified themselves as being optimists, and of seeing "the glass as half full." But that's not to say owners are without worries. About 53% worry about whether they can save enough for their own retirement.

When it comes to lending opportunities for community banks, the good news is that a majority of small business owners still plan to make capital investments in their business over the next 6 months (51%), but unfortunately that level is down from 56% at the end of last year. Even stranger perhaps, this is despite the fact that 83% of small business owners say they are much more confident than the year before.

Perhaps one driver here is that this group said their "top priority" at 39% was to maintain their current business and revenue sources. Toward that end, 84% said they will place a "heightened focus" on customer care in hopes of differentiating their company from their competitors.

Finally, consider research by the US Chamber of Commerce. It found that over the last 15Ys, women-owned businesses have grown by 1.5x the rate of other small businesses and now account for almost 30% of all new businesses.

Clearly, as we have discussed today, small business owners are optimistic - regardless of whether they are women or men. They are a great customer base for community banks, who support so many of these entrepreneurs, so keep up the fantastic work you do as you seek to expand your business and theirs.

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